Thames Water today published its Annual Performance Report for 2016/17 alongside an independent report from the company's Customer Challenge Group (CCG) giving its assessment of how the company performed during the year.
Thames Water faced a difficult year in 2016/17 with seven performance commitments incurring a combined automatic penalty of £18.4 million, for leakage, the condition of its below ground water network, sewage treatment works discharge compliance, sewer flooding (other causes) and the security of supply index. To improve resilience of its largest ‘trunk’ mains, it has committed to investing an additional £97 million before 2020, on top of the more than £4 billion being invested in its infrastructure over the course of the 2015-2020 regulatory period. The company invested more than £1 billion again during 2016/17.
Over the same period, the company has made headway on many of its 55 performance commitments, achieving green or amber status for 34 of the 42 targets which are assessed annually. 22 of the performance commitments can attract automatic penalties or rewards as part of the transparent Outcome Delivery Incentive (ODI) regime agreed with Ofwat.
Thames Water received a total reward of £3.2 million for minimising supply interruptions lasting more than four hours and odour reduction. The company saw its best ever performances in producing electricity from sewage and resolving complaints, while also reducing ‘bad debt’ and maintaining exceptional drinking water quality (99.96% compliance).
The balance between the automatic penalties and rewards amounts to a penalty of £15.2 million. This sum will be returned to customers in the form of lower bills between 2020 and 2025.It has been a year of significant change for the company. With a refreshed executive team and new major shareholders, Thames Water is embarking on a new chapter in its 400 year history.
Steve Robertson, CEO Thames Water, said: “We take all aspects of our performance seriously and are committed to doing the right thing for our customers and the environment. That includes continuing to invest significantly in improvements to our network. During this year we failed to meet some important commitments and recognise the need to make urgent improvements. More positively, we are pleased to have also earned rewards, including for reducing supply interruptions lasting more than four hours. Our focus now is on getting all aspects of our operational performance and service to customers back on track as quickly as possible.”
The Annual Performance Report can be found here, alongside the CCG’s report.